Recent Posts

While the number of unemployed workers has held steady at around
14 million in recent months, another telling measure of
frustration in the labor market—the number of underemployed
individuals—rose for a third consecutive month in September, by
almost a half of a million people.

Almost 9.3 million Americans are considered underemployed,
defined by the Bureau of Labor Statistics as working part-time
for economic reasons, such as unfavorable business conditions or
seasonal declines in demand.

That's up from just over 8 million in July, but down from a peak
of about 9.5 million in September 2010. In addition, about 2.5
million individuals are considered "marginally attached to the
labor force," meaning they were not in the labor force, wanted
and were available for work, and looked for a job sometime in the
prior 12 months. (They are not counted as unemployed because they
had not looked for a job in the past four weeks prior to the
survey.)

Put together, almost 26 million Americans are either unemployed,
marginally attached to the labor force, or involuntarily working
part-time—a number experts say is unprecedented.

"The labor force is substantially underutilized relative to what
we experienced in most of the post-World War II period," says
Patrick O'Keefe, director of economic research at accounting firm
J.H. Cohn and former deputy assistant secretary in the U.S.
Department of Labor.

From 2003 to 2007, before the latest recession, O'Keefe says the
number of people working part-time for economic reasons as a
percent of the labor force averaged about 3 percent, or
approximately four million people. Over the past 12 months, the
average has been about 6 percent.

To get a more accurate understanding of the struggles that many
Americans face, that base should be broadened even further, says
Paul Osterman, co-author of Good Jobs America: Making Work
Better for Everyone. He says it's important to consider
people who are working, but at substandard wages. According to
Osterman, about 20 percent of adults have jobs that pay
poverty-level wages (the poverty line is currently $22,500 a
year). "I'd consider that to be another version of
underemployment—mainly jobs that are just too low-quality," says
Osterman, who is also co-director of the MIT Sloan Institute for
Work and Employment Research. Americans who fall below the
poverty line make less than $10.50 an hour.

"The labor market is just not delivering for Americans what it
should be delivering," Osterman says. "The weaknesses are on
multiple dimensions—one is just the quantity of jobs, and the
other is the quality of jobs that do exist."

Economists say the high number of underemployed workers is a sign
of the tough economic times. "One of the things that seems to be
happening these days is that companies in an uncertain
environment are tending to take people on part-time instead of
full-time because they don't want to make that full-time
commitment," says Dennis Jacobe, chief economist at polling firm
Gallup. By taking on part-time employees
instead of full-timers, companies aren't forced to pay benefits
or bring on employees for extended periods of time. It's also a
lot more difficult to let full-time workers go, Jacobe adds.

That's left millions of Americans trying to make ends meet by
working multiple part-time jobs. "There are a lot of people today
who are self-employed, and they go through periods of their life
where they're cobbling together various jobs or projects or
consulting assignments or temporary work," says John Challenger,
chief executive officer of outplacement firm Challenger, Gray
& Christmas.

Ted Schnell of Elgin, Ill., is one of those people. For the first
time in his 27 years as a journalist, the now 52-year-old father
of five found himself unemployed in December 2010 after being
laid off by Sun-Times Media. Since January, he's worked part-time
for a former colleague who started a local news site. Schnell has
written about his experiences on his blog Laid off at 51: Seeking joy in
change.

For a few weeks earlier this year, Schnell was able to land two
copyediting jobs at two regional Patch.com sites, but AOL, which owns Patch, slashed its freelance
budget soon after and he lost one of those positions. "It's
miserable in terms of what I'm making," Schnell says. In
addition, he says he's stuck in a house that's worth
substantially less than his mortgage, and he's had to ask his
father to help with payments. Schnell, like many older
underemployed Americans, says he's worried that he may get passed
over by potential employers because of his age. He remains
discouraged. "For every 50 to 100 resumes I send out, I may get
one interview," he says.